NNPC pays over $2 billion in fuel debts

NNPC has paid $2-2.5 billion of fuel import debts but suppliers still face up to seven months beyond normal credit terms to receive other oustanding payments, trade sources said. NNPC owed between $3-$6 billion in fuel debts in September when the payment backlog stretched over 300 days, or 10 months, trade sources said. NNPC representatives came to London in July to assure suppliers that the company would pay off a significant portion of the backlog by the end of August. Nigeria is Africa’s top oil exporter but insufficient refinery capacity means that it relies on imports of fuels, mostly gasoline, for up to 85 percent of its oil product needs. “I understand the figure was about $2.4 billion,” said Michael Prest, chief executive of oil trading and exploration company Petrodel which delivers fuel to the Nigerian market, in reference to the size of the NNPC payment to suppliers. He added that NNPC payments are now taking between 190-220 days, or between 6-7 months in addition to normal credit terms.

Two other trade sources with direct knowledge of the Nigerian downstream sector said NNPC has paid suppliers between $2-$2.5 billion of the total bill estimated at $3-$6 billion. “A lot of people have been getting squeezed. The government stumped up some cash and that has calmed things down a lot,” said an industry source